What is the definition of 'Net Company Sales' for Cicis?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
Definitions
As used in the following Tables:
"Fee Based Net Sales" means all sales, revenues, charges and receipts received by the restaurants in the Data Set including all business insurance proceeds, whether from cash, check, credit or debit card, gift cards, barter exchange, trade credit or other credit transactions, but excludes (i) sales tax and other related taxes collected from the customers and paid to the applicable federal, state, municipal, or local authority, (ii) any refunds made to customers, (iii) receipts from the sale of products from vending machines, and (iv) revenue that is generated from the operation of video game machines (including bulk machines). Except for the exclusion of revenue generated from the operation of video game machines, this is the same definition as "Net Sales" in the Franchise Agreement. In the Franchise Agreement, revenue generated from the operation of video game machines is included as part of your Net Sales, but we have historically not required, and do not currently require, that you include that revenue when calculating your Royalty, Fund Contributions, and other fee-based payments to us, although we reserve the right to do so in the future.
"Game Room Sales" means aggregate revenue derived by the restaurants in the Data Set from the operation of the game room and video game machines.
- "Net Company Sales" is the sum of Fee Based Net Sales plus Game Room Sales.
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 53–58)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, 'Net Company Sales' is defined as the sum of 'Fee Based Net Sales' and 'Game Room Sales'. 'Fee Based Net Sales' includes all sales, revenues, charges, and receipts from various payment methods, including business insurance proceeds. However, it excludes sales tax, customer refunds, vending machine sales, and revenue from video game machines. It's important to note that while the Franchise Agreement includes video game machine revenue in 'Net Sales', Cicis currently does not require franchisees to include this revenue when calculating royalty, fund contributions, and other fee-based payments, although they reserve the right to do so in the future. 'Game Room Sales' refers to the aggregate revenue derived from the operation of game rooms and video game machines within the Cicis restaurant.
For a prospective Cicis franchisee, understanding this definition is crucial because 'Net Company Sales' is used to calculate various financial metrics and is a key component in determining the overall financial performance of a Cicis restaurant. The FDD provides average monthly and annual metrics based on 'Net Company Sales', such as the highest monthly Net Company Sales being $277,428 and the lowest being $54,894, with a median of $113,562. Annually, the highest Net Company Sales was $3,329,140, the lowest was $658,727, and the median was $1,362,750. These figures can help potential franchisees gauge the potential revenue of a Cicis location.
Furthermore, the distinction between 'Fee Based Net Sales' and 'Net Company Sales' is important because certain expenses and contributions, such as advertising and royalty expenses, are calculated based on 'Fee Based Net Sales', while other amounts are calculated as a percentage of 'Net Company Sales'. This difference impacts the overall financial obligations of the franchisee. The FDD also notes that some franchisees are subject to older franchise agreements with different payment amounts, which are adjusted in the provided tables to reflect current agreement terms. Therefore, a clear understanding of these definitions and their implications is essential for accurately assessing the financial aspects of a Cicis franchise.